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Milk Prices Likely to Drop in September

Plunge should reflect lower prices being paid to farmers for unprocessed milk.

August 29, 2004, 08:00 pm

MINNEAPOLIS -- Retail prices for milk should come down in September, reflecting lower prices being paid to Upper Midwest farmers for their raw, unprocessed milk, according to the National Milk Producers Federation, reported the St. Paul Minn.-based Pioneer Press.

Using price data gathered in major U.S. cities, the federation found retail prices for milk averaged $3.79 per gallon at two supermarkets and leading convenience stores in Minneapolis. That figure was well above the U.S. average retail price of $3.47 per gallon, and doesn't reflect savings from raw milk prices that fell to $1.41 per gallon in early August. The farm price is expected to be $1.35 per gallon in September, more than a 60-cent per gallon drop from the peak of $1.97 per gallon farmers received in June.

Regional differences cause widely ranging prices for milk across the nation, said Chris Galen, spokesman for the federation. State laws aimed at protecting dairy farmers -- by banning loss-leader advertising and other pricing practices -- also affect retail prices in specific markets. Dairy suppliers usually set a wholesale price at the beginning of a month, thus increases and in prices aren't reflected until the next month.